KARACHI - Huge amount of liquidity of the exporters of Value Added Textile Sector is still blocked with FBR causing immense amount of problems to cash-starved and struggling exporters, stated Muhammad Babar Khan, Chairman, Pakistan Hosiery Manufacturers & Exporters Association, Southern Zone.
He said that millions of rupees refunds of ST and Customs Rebates payable to the exporters have been held up despite firm assurance by the Finance Minister, Ishaq Dar in his budget speech that by 30th Sep, 2014 all refunds of the exporters would be cleared. However it is learnt that FBR has released cheques against RPO’s of 30th Jun 2014. All the fresh refund claims submitted after 30th Jun 2014, are pending. It has also been learnt that Ministry has issued instruction to FBR for processing of only fresh refund claims submitted up to 30th Jun 2014. The major amount of the exporters accumulated from last five to six years on account of deferred payment held due to problem in electronic cross verification. No instructions were issued for clearance of these old pending claims, he added.
Babar said that the previous govt issued RPOs (Refund Payment Orders) after which the payment were cleared speedily but now despite issue of RPOs since almost 4-5 months no cheques are being released which is indeed most alarming and reflects financial weakness of the government. He further lamented that the value added textile exporters are battling hard for their survival in the global market in the face of severe competition from neighbouring and other competing countries and also struggling to meet their export commitments despite most adverse factors here and this severest ever liquidity crunch would lead to disastrous consequences for the exports of our nation.
He appealed to the Finance Minister to issue immediate instructions to the FBR for speedily releasing cheques against all the pending Sales Tax Refunds and Customs Rebate Claims to save the exports of our nation from complete ruin. He also proposed that the Government should revert to the “No Payment No Refund” Regime for the Textile Export Sector just because exports are a great source for earning valuable foreign exchange for any nation as the collection of 2pc Sales Tax and then refunding is not only an exercise in futility but involves large number of FBR personnel and precious time of FBR which can otherwise be utilised to bring more and more persons in the tax net to increase revenue for the FBR.